Not only is confidence in a European recovery growing – despite the likelihood of a third bailout for Greece – but company valuations are incredibly cheap, says Butcher, who has managed European equities for 15 years.

‘Investors should understand they’re not investing in European politicians, but in European firms. They are world leaders in many sectors and at the moment you can buy them cheaply,’ she says.

‘This is a region of great opportunity. I expect to see steady recovery.’
Butcher’s fund is testimony to the opportunities to be found in Europe.

It has done remarkably well in the past 12 months, generating returns of 44 per cent, more than double the FTSE All-Share index’s 19 per cent gain, and is well ahead of the 28 per cent gain achieved in a year by the FTSE World Europe excluding UK index. It ranks third in its peer group of 97 funds.

She says: ‘The outperformance is due to the stocks we’ve chosen.’
The fund focuses on Continental, dividend-paying firms. The income for an investor buying today is just over three per cent, paid every June and December.

However, the fund’s record of growing dividends is chequered, with income last year falling.
Butcher’s aim is to increase both income and long-term capital growth and she currently prefers unloved, low-valued areas, such as Spain.

Invesco Perpetual European Equity Income fund has done remarkably well in the past 12 months

She is also overweight in financials – mainly Continental banks which she believes have potential to grow dividends. One such holding is Spain’s Bankinter.
‘It has minimal exposure to real estate and also has a successful insurance business,’ says Butcher.

She avoids defensive stocks such as Unilever and L’Oreal, which many investors have flocked to in a flight to safety. ‘These are great companies but current valuations are very stretched,’ she says.

Many advisers like her approach. Among them is Gavin Haynes, boss of Bristol-based investment adviser Whitechurch Securities.

‘This fund is firmly on our radar for investors seeking European equity exposure. I believe her approach will deliver in a climate of recovery in Europe,’ he says.

Haynes recommends that investors have about 10 per cent of their portfolio in Europe.